Fed's Lockhart: First rate hike likely in mid-2015

WASHINGTON (MarketWatch)-- Dennis Lockhart, the president of the Atlanta Federal Reserve, said Wednesday that he still thinks the central bank will first hike short-term interest rates in the second half of 2015. In a speech at Mercer University, Lockhart said the central policy question facing the Fed is the "timing of the liftoff." He said only dramatic developments would cause the Fed to alter the pace of its steady reduction in asset purchases. The Fed has cut its asset purchases by $10 billion at each of the last two meetings and economists expect a similar move next month. Lockhart said the Fed's forward guidance was a work in progress. "The key criteria for a liftoff decision are a firming of inflation to near the FOMC's target of 2% and both a quantitative and qualitative closing of the employment gap," he said. Lockhart said he was "looking through" the spate of weak data since the beginning of the year and still expected sustained higher growth in 2014 as a whole.

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